GlaxoSmithKline agrees to $3 billion fraud settlement

GlaxoSmithKline PLC has agreed to plead guilty to misdemeanor criminal charges and pay $3 billion to settle the largest case of health-care fraud in U.S. history, Reuters reported.

The settlement includes $1 billion in criminal fines and $2 billion in civil fines in connection with the sale of the drug company's Paxil, Wellbutrin and Avandia products, according to filings today in federal court.

Deputy U.S. Attorney General James Cole said at a news conference in Washington, D.C., that the settlement "is unprecedented in both size and scope."

As part of the settlement, GlaxoSmithKline agreed to strict oversight of its sales force by the U.S. government to prevent the use of kickbacks or other prohibited practices.

States would receive about $210 million, according to the agreement with the Justice Department.

GlaxoSmithKline said in a statement it would pay the fines through existing cash resources. The company announced a $3 billion charge in November related to legal claims.

CEO Andrew Witty said his company's U.S. unit has "fundamentally changed our procedures for compliance, marketing and selling. When necessary, we have removed employees who have engaged in misconduct."